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  1. #1

    Default Looking for some advice

    Hello everyone, this is new to me, and just wanting to find out is it okay to ask for some advice.
    we are now looking to buy our first investment property. There is a couple of bits i would like to get to know about from anybody on , whether to buy , in Tuatapere Southland, at $49k, which i feel really comfortably with anything under $120k, or do we buy houses around the 300k to 400k in Auckland where we live.

  2. #2
    Join Date
    Apr 2005
    Location
    Auckland / Cappadocia, Turkey
    Posts
    2,312

    Default

    Hi Rockfisherman,

    Welcome to the forum! And yes, it's certainly OK to ask for advice - that's what makes this forum so great!

    So what do you know about the area? For example, what is the likely rent you will achieve? How does this fit in with your investment rules? Is there a good market of renters there? (There's no point in having a great rental property when there is no one there to rent it from you!)

    Have a good look around the forum - there are some excellent posts from some very experienced people who talk about setting up your rules first - and sticking to them! Don't just look for the cheapie houses - these are not necessarily the best IP's!
    Lisa

  3. #3
    Join Date
    Jun 2005
    Location
    Auckland
    Posts
    3,936

    Default

    I agree with BusyLizzy on this one. you have come to the right place. Have a look around and try work out a strategy which you are comfortable with not others. Dont be scared to ask questions either thats we are all here for.
    Personally I think you need to work out deep down why you are wishing to invest and how you will do this. Alot of Mum and Dad type investors have just done so because it was the latest fad and have not worked out the downsides.

    I wrote an article which may help answer alot of your questions it is available https://www.propertytalk.com/forum/sh...taker+hamilton

  4. #4

    Default

    Thankyou for your quick relpies, the salesperson said the rent down there would be $100pw? a 2brm house, forestry workers, and a meat works is there, they would be more likely be the people to be renting while working there.
    After renting in Auckland for 13 years we got into action and stepped into buying our first house, a good feeling we got from doing this, wish we had done this years ago.
    41 years old we will be in this for the long term, starting by using the equity in our house to help us obtain our first few properties, which is wiser than using it on new cars and boats, we thought.
    One other aspect about buying property in the South Island are looking at buying it without seeing it , is that ok.
    Going to go look at the advide you put in , where it says alot about ways , and structures, that is one thing that was going to be done so we run it as a bussines, rather than a fad.

    This been great to find somewhere, to ask these questions, i find it not as easy to write them down, just as we do not know anyone personally that has done this, which would be beautiful to have them to talk to, so this,is why when we found this site we thought it would be a good place to start.

    Thankyou.

  5. #5
    Join Date
    Sep 2003
    Location
    High up above and deep down under
    Posts
    10,915

    Default

    Hi Rfman

    Have you done any reading on the subject of property investing?

    If not there are a number of books available through Propertytalk's Resources.

    Personally I like to have a driveby every now again and that means living reasonably close by(3 hours drive).

    Keep the questions coming.

    Save a fish for me
    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  6. #6
    Join Date
    Sep 2003
    Location
    High up above and deep down under
    Posts
    10,915

    Default

    Hi Rfman

    This will lead you to Whitt's article on Property Investing.

    https://www.propertytalk.com/forum/showthread.php?t=3543

    Save a fish for me.
    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  7. #7
    Join Date
    Mar 2004
    Location
    Thames, NZ
    Posts
    477

    Default

    I am not sure if I am in a place where I would buy sight unseen.

    However if you plan to do this I would suggest :

    - A due diligence cluse for your contract.

    - Find a property manager locally who is independant from the agency selling the property to give a rental assessment (get this written as the banks may want this) and to take photos for you, though the agent can do this it may not be very reflective of the property. You may have to pay a nominal sum for photos by the property manager or maybe nothing (but cheaper than flying down each time).

    - Building, plumbing and electrical inspections...get these trades people to talk about the house and area to get more of a feel.

    - Talk to the local council and see if there are outstanding issues on the property. Talk to planners about the district etc and developing regulations for subdividing etc if you are keen on this.

    - Get the agent to send lots of photos, which should include photos of neighbouring properties on all sides and across the road. Photo's of up and down street.

    - Find out if you are in an industrial area etc as this may have a bearing.

    There is more you can do and ask along these lines so think of other things to ask.

    Hopefully other members can add to my list for buying unseen as it were.
    How do you eat an Elephant?
    One Bite at a Time!! (Source: Spaceman)

  8. #8

    Default

    Thanks Muppet and Austin, yes i've read some books, which has been good imformation, just got to get in and make the first step now of doing it.

    Lots of peoples postings i have read here , mention buying 20 to 30% below RV, as i would not know what RV would be in the South or even in Auckland, How would i arrive at knowing that figure to put in a written offer.

    Do you just start with a low offer at a guess, or is the asking prices below or above the RV of the property?

    Would 2brm units , in Auckland be okay to start with in the $200 to $ 300K, just what i have seen from books, and one person from a bank says , houses are better from a resale point of view.
    Although as i see it, at least units in good locations are always rentable, and people are always snapping them up, we were in a one brm unit renting in Ellersile for three years in a complex of twenty units, as soon as one was empty, it was always tennated right away.

    Will gladly save you a fish .

    Thankyou.

  9. #9
    Join Date
    Mar 2004
    Location
    Thames, NZ
    Posts
    477

    Default

    It really comes down to you knowing your market.

    I have kept an eye on property prices over the North Island for about 2.5 years now.

    So by doing so when I see a property in these areas I get a feel for it.

    You can then delve deeper by asking the agents etc..

    Also I think you can look at statistics of property sales and can sign up with QV or otherwise to see what prices houses are selling for.

    Really at the end of the day the property has to financially work for you as part of your investment rules, in todays market and tommorrows (this cannot be definite but you can guess generally close enough as the properties don't generally drop and if so not much "GENERALLY")

    Personally I would stick to houses unless you buy the whole block, because otherwise you will have no control over the future standard of your asset. 3 to 4 bedrooms will give you a wider market.
    How do you eat an Elephant?
    One Bite at a Time!! (Source: Spaceman)

  10. #10
    Join Date
    Feb 2004
    Location
    North Waikato
    Posts
    651

    Default

    Many investors are after positive cash flow properties, before any tax relief. This does make it harder to find properties in Auckland, although not impossible.

    One issue to watch with the very cheap areas (apart from the more obvious things like location, rentability etc) is that it still costs the same to maintain a $50K house as a $200K one. This can seriously erode what looks to be a good cashflow property.

    If you are after capital gains, which is more in the realms of speculating rather than investing, then possibly there is no hurry to buy now. Wait for the next property boom to start. Why sit in a loss making property for the next five or so years??

    A very typical pattern is for 'ma & pa' investors to finally buy their first two or three rentals right at the peak of the boom. They have seen so many stories about how much money people have made, they decide to take the plunge. They typically buy in the cheaper suburbs and help drive the prices up. After five years of rental hell, they sell exactly at the bottom of the market at a huge loss as they just can't stand the hassles any more. We had some great buying in Manuwera 2-3 years ago and often when you researched the stats, the house had been bought in 1997, for $20 to $30K more (at the last peak).

    John


 

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